Problem: You have a requirement for the development of a special type of drone. Because this is for research and development (R&D) in a highly complex area, you believe a cost-reimbursement type contract is appropriate. The technology is so new and revolutionary, you don't believe an incentive contract is appropriate and are going to recommend a cost-plus-fixed-fee (CPFF) type contract. Which statement below is correct?
- An incentive can never be used with a cost type contract.
- The contractor must have an adequate accounting system.
- The contractor must always be a small business when awarding a contract for research and development.
- Only Time and Materials (T&M) type contracts can be awarded for research and development.
Please provide FAR/DFAR reference with an answer in proper format.